– By Karippur Nanda Kumar
Companies from the Indian retail sector are facing several challenges today such as increased competition from online marketplaces, increasing costs of advertising and customer acquisition and stringent consumer privacy regulations. According to Forrester’s 2021 India Customer Experience Index, only four out of 29 brands managed to significantly improve their customer experience scores. Retail companies hence need to rethink their strategies for delivering positive customer experiences to survive and grow business.
The digital age is transforming customer habits in India further accelerated by the Covid-19 pandemic. Today’s customers believe and live in an omnichannel world. The rapid rise in internet users and smartphone penetration coupled with rising incomes is driving e-commerce in India and as per Grant Thornton, e-commerce in India is expected to be worth US$ 188 billion by 2025. India had the third-largest online shopper base of 150 million in FY21 after China and USA and the Indian customer base is expected to be 350 million by FY26. There is hence a tremendous opportunity for Indian retailers to digitally connect and engage customers. But most companies still force these digitally savvy customers onto paths of engagement that are shaped by legacy processes and conventional e-commerce technologies and platforms.
Also Read: Tata Power to offer clean & green energy products & solutions in Odisha
Service quality, reliability and trust are key factors for winning and retaining retail customers as they increasingly define value as a personal connection between themselves and a retailer or brand. The way to win customers hence starts with a deep understanding of how to create an offering that each customer value more than competitors’ offerings. The good news is retail companies now have access to a range of integrated AI tools and platforms involving technologies such as text analytics, machine learning, chatbots, robotics, image recognition and natural language processing.
Such AI technologies can offer better customer profiling, personalised services, dynamic pricing, counterfeit detection as well as help expand the capacity of the retail companies to have better supply visibility. AI based personalised solutions can harness both real time and stored data to personalise each shopper’s end-to-end omnichannel experience in this context. AI applications could use data to dive deeper into every customer’s behaviour and their purchase patterns to perform predictive analysis for driving better engagement at the right place and time to achieve customer retention. Such advances in AI applications creates tremendous opportunities for smaller retail companies of India to understand and serve customers across the world and effectively compete with larger companies.
(Karippur Nanda Kumar, Professor of Information Technology at SP Jain School of Global Management, Singapore)